The Risk of Leadership

10 March 2017

A plea for a new search for modern leadership.

By Jack Kruf

Yes, we have our democratic system as a great set of principles and values for good public governance. Public leadership is embedded in this, at least it should be. You may expect excellent results, because the democratic system traces back to the Greek δημοκρατία 508 BC. From there it developed until now, anno 2017. Considering the state of society and natural ecosystems you may expected more of 2525 year of development. The Global Risks Report 2017 by the World Economic Forum tells the story of how critical the earth condition is. Reading this report I had a flashback to the year 1972 when the Club of Rome presented their first findings.

Within this democratic system the results of our public leadership over the years are not that good. More than ever public risks seem to emerge at a faster pace – such as there are disruptions caused by climate change and cybercrime, large scale pollution and poverty, fundamental lack of social cohesion, water shortage and migration issues. Well, what can we say about risk leadership while leadership itself seems to be the risk? We elaborate on this.

Public leadership must be reconsidered against the background of the structural and diminishing trust of citizens in political and public: “Houston, we have a problem here”. The general feeling is that public leaders do not listen to citizens and companies, are perceived as the ‘elite’, do not act in line with their promises. Factor which is felt making it worse is the fact most of the public leaders disappear after the governing period 4- 5 year and make place for a new wave of fresh politicians with new promises. During every period of governance most of them act as if they are disconnected to the daily life in streets and on squares. There is the felt high need for leaders for generating true safety and security. For those who actual invest in cohesion and cooperation and offer protection. No leaders work from the complex system of rules and regulations, rather than from the living world of feelings and every day struggles of citizens and companies. From this perspective it is obvious that managing the public risks through leadership – well defined as risk leadership – needs to be redefined. The fact is that leadership itself has become a risk factor for a balanced society in the long term, is worrying.

So yes, we need leaders that bind us and do not quarrel with their elected councils and political opponents. In the round tables and the European think tank ‘From Global to Local’ has been strongly brought forward by different stakeholders (from public and private sector), the impressions that society itself is on a drift and that the democratic set of tools is running out of control. More involvement of government in the life of citizens is needed more than ever. In the (unexpected) outcomes and results of elections and referenda of the last year it more and more becomes evident that politics – according Machiavelli the world of power and influence – is one of the key drivers of public risk itself. Zooming in a bit more here. What is political risk? According to Wikipedia our collective definition is:

Political risk is a type of risk faced by investors, corporations, and governments that political decisions, events, or conditions will significantly affect the profitability of a business actor or the expected value of a given economic action. Political risk can be understood and managed with reasoned foresight and investment… Businesses and even governments may face complications from political decisions – any political change that alters the expected outcome and value of a given economic action by changing the probability of achieving business objectives.

It leads in my opinion to the conclusion that risk leadership needs to be reconsidered, redefined reinvented or re-engineered. If one of the key aspects in public governance is not or not optimal functioning, then it is legitimate to do so. It is clear from the European UDITE and PRIMO network that many managers express the general feeling from experience (with society, citizens, clients, investors, businesses, NGO’s and media), that the unpredictable working of politics has become a critical factor and express that the system of democracy itself is under cover. What is leadership if “democracy is the worst form of government, except for all the others.” (Winston Churchill). What is in perspective of the emerging public risks in fact the ability of democracy? Al Gore reflected in ‘Our Choice: Changing the way we think’ (2009) as follows: ”It is now apparent that the climate crisis is posing an unprecedented threat…to our assumptions about the ability of democracy and capitalism to recognize this threat for what it is and respond…”. These doubts among all form the background for a reflection on leadership.

Discussing the major public risks within the European network of public leaders the main concept for leadership that addresses and mitigates is felt in the form of stewardship, not (only) in the religious way but as a form that has a true holistic approach. We remember here the great Alexander von Humboldt and his holistic approach over the borders of sciences in the early 19th century. He essential connected sciences and approach and crossed the lines of segmentation of opinions and vies into a true ecological approach of areas and topics. Could his approach be a starting point for a more successful approach of public leadership, connecting vertically detail with headline, strategy with implementation and horizontally all relevant stakeholders. This way of perception could be beneficial and a great asset for modern leaders.

Elaborate a little bit more on Von Humboldt. To be able seeing things as one and interconnected is the capacity of true ‘reflection’ needed, i.e. the capacity zooming out and seeing the larger picture, in connecting the dots. Like Alexander von Humboldt did in his 1858 masterwork (Cosmos part I). He for the first time in history connected the different sciences of the living and non-living world. He concluded: “Physical geography…, elevated to a higher point of view, … embraces the sphere of organic life…”. That was a great discovery. On governing cities and regions this reflection can be of great advantage in diagnosing the problem and define actions. Reflection is needed to get the bigger picture of things, people and happenings and to develop a sabbatical and clear view how to lead. It helps leaders getting the bigger picture, see more sharply the connection of elements within the public domain and thereby contribute to better decision making and putting things in perspective.

From the network of PRIMO comes the experience that most of the public risks emerge from firstly lack of reflection capacity by leaders and with that insufficient diagnoses causes ineffective decisions. Only 12% of policies leads to implementation and from this only 25% is effective. Secondly lack of good working interfaces between stakeholders caused by a lack of binding leadership and thirdly by what can be defined as responsible-in-the-end leadership, i.e. stewardship. The last being an ethic that embodies the responsible planning and management of resources.

The concept of Risk Leadership can be possibly enriched with key leader capacities of reflection, connection and stewardship. In my view these can contribute to the reduction of risks, caused by leaders themselves and improve the quality of public and private governance and management in general. The initiative of Risk Leadership by the St. Thomas University could not have been timed better in this timeframe of changing paradigms, drifting societies and on a large scale emerging public risks. It is time for change.